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Job Loss and Regional Mobility

Author

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  • Huttunen, Kristiina

    (Aalto University School of Economics)

  • Møen, Jarle

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Salvanes, Kjell G.

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

Abstract

It is well documented that displaced workers suffer severe earnings losses, but not why this is so. One reason may be that workers are unable or unwilling to move to regions with better employment opportunities. We study this and find that job displacement increases regional mobility but the mobility decisions are driven also by non-economic factors such as family ties. As a results, movers tend to be a heterogeneous group. We find that on average displaced workers who move suffer larger income losses than displaced workers who stay in the same region. However, the entire post displacement income difference between movers and stayers is driven by workers moving to regions where parents live or to rural areas.

Suggested Citation

  • Huttunen, Kristiina & Møen, Jarle & Salvanes, Kjell G., 2016. "Job Loss and Regional Mobility," Discussion Paper Series in Economics 17/2016, Norwegian School of Economics, Department of Economics.
  • Handle: RePEc:hhs:nhheco:2016_017
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    2. Terhi Maczulskij, 2019. "Occupational Mobility of Routine Workers," Working Papers 327, Palkansaajien tutkimuslaitos, Labour Institute for Economic Research.
    3. Joanna Tyrowicz & Lucas van der Velde, 2017. "When the opportunity knocks: large structural shocks and gender wage gaps," GRAPE Working Papers 2, GRAPE Group for Research in Applied Economics.
    4. Maczulskij, Terhi & Böckerman, Petri & Kosonen, Tuomas, 2018. "Job Displacement, Inter-Regional Mobility and Long-Term Earnings," IZA Discussion Papers 11635, Institute of Labor Economics (IZA).
    5. Gaetano Basso & Francesco D’Amuri & Giovanni Peri, 2019. "Immigrants, Labor Market Dynamics and Adjustment to Shocks in the Euro Area," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 67(3), pages 528-572, September.
    6. Fang, Tony & Messacar, Derek, 2019. "Voluntary Job Separations and Traditional versus Flexible Workplace Saving Plans: Evidence from Canada," IZA Discussion Papers 12262, Institute of Labor Economics (IZA).
    7. Krolikowski, Pawel & Zabek, Mike & Coate, Patrick, 2020. "Parental proximity and earnings after job displacements," Labour Economics, Elsevier, vol. 65(C).
    8. Arthur Grimes & Shaan Badenhorst & David C. Maré & Jacques Poot, 2020. "Hometown whanau or big city millennials? The economic geography of graduate destination choices in New Zealand," Working Papers 20_04, Motu Economic and Public Policy Research.
    9. Meekes, Jordy & Hassink, Wolter, 2020. "Fired and Pregnant: Gender Differences in Job Flexibility Outcomes after Job Loss," IZA Discussion Papers 13779, Institute of Labor Economics (IZA).
    10. Willage, Barton & Willén, Alexander, 2020. "Postpartum Job Loss: Transitory Effect on Mothers, Long-run Damage to Children," Discussion Paper Series in Economics 22/2020, Norwegian School of Economics, Department of Economics.
    11. Frings, Hanna & Kamb, Rebecca, 2021. "What explains the urban wage premium? Sorting, non-portable or portable agglomeration effects?," Ruhr Economic Papers 916, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    12. Maczulskij, Terhi & Böckerman, Petri, 2019. "Losing a Job and (Dis)incentives to Move," ETLA Working Papers 75, The Research Institute of the Finnish Economy.
    13. Emmler, Julian & Fitzenberger, Bernd, 2020. "The role of unemployment and job change when estimating the returns to migration," IAB Discussion Paper 202037, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    14. Daniel Fackler & Eva Weigt, 2020. "Who Buffers Income Losses after Job Displacement? The Role of Alternative Income Sources, the Family, and the State," LABOUR, CEIS, vol. 34(3), pages 239-276, September.
    15. Merja Kauhanen & Terhi Maczulskij, 2017. "Where do workers from declining routine jobs go and does migration matter?," Working Papers 314, Palkansaajien tutkimuslaitos, Labour Institute for Economic Research.
    16. Rattsø, Jørn & Stokke, Hildegunn E., 2019. "Identification of the private-public wage gap," Labour Economics, Elsevier, vol. 59(C), pages 153-163.
    17. Emmler, Julian & Fitzenberger, Bernd, 2020. "The Role of Unemployment and Job Change When Estimating the Returns to Migration," IZA Discussion Papers 13740, Institute of Labor Economics (IZA).
    18. Ciani, Emanuele & David, Francesco & de Blasio, Guido, 2019. "Local responses to labor demand shocks: A Re-assessment of the case of Italy," Regional Science and Urban Economics, Elsevier, vol. 75(C), pages 1-21.
    19. Daniel Fackler & Lisa Rippe, 2016. "Losing Work, Moving away? Regional Mobility after Job Loss," SOEPpapers on Multidisciplinary Panel Data Research 861, DIW Berlin, The German Socio-Economic Panel (SOEP).
    20. Meekes, Jordy & Hassink, Wolter H.J., 2019. "The role of the housing market in workers′ resilience to job displacement after firm bankruptcy," Journal of Urban Economics, Elsevier, vol. 109(C), pages 41-65.
    21. Meekes, Jordy & Hassink, Wolter, 2017. "The Role of the Housing Market in Workers' Resilience to Job Displacement after Firm Bankruptcy," IZA Discussion Papers 10894, Institute of Labor Economics (IZA).
    22. Bennett, Patrick & Ouazad, Amine, 2018. "Job Displacement, Unemployment, and Crime: Evidence from Danish Microdata and Reforms," Discussion Paper Series in Economics 32/2018, Norwegian School of Economics, Department of Economics, revised 21 Dec 2018.

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    More about this item

    Keywords

    Plant closures; downsizing; regional mobility; earnings; family ties.;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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